Build-to-rent (BTR) is an emerging trend in the UK housing market. Inspired by what’s available in large parts of Europe and North America, build-to-rent has emerged in response to soaring demand for quality rental housing. With new developments reflecting the changing needs and priorities of modern renters. Some consider them the future, while others have reservations. To help you decide if you should live in one, we take a look at the B2R scene.
What is B2R?
Build-to-rent is pretty much what it says on the tin – homes built for renting rather than for sale. A build to rent development consists of clusters of at least 50 homes (usually apartments) designed and purpose-built to let to private tenants.
Blocks of BTR apartments are typically funded by financial institutions who see them as a long-term investment – they earn rent from tenants over many years as the return on their investment.
BTR blocks may well have a ‘brand name’ and be of a higher standard than most other privately-let properties, which tend to be converted houses that are owned and managed by individual landlords.
As of January 2020, there are 40,200 BTR apartments across the UK, with just over 35,000 under construction and 75,500 others planned – that sounds a lot but there are five million households privately renting, so BTR remains a very small part of the rental sector…for the moment.
What’s the appeal of B2R?
What makes build-to-rent different is the focus on service, with build-to-rent developments offering professional on-site management and amenities including on access to free broadband, on site gyms and fitness centres. Some even have swimming pools and cinemas.
A lot of them will have big communal spaces like games rooms, bars, or lounges. Most also include concierge services so it’s more like living in a modern hotel with a private suite, or a posh university dorm. No need to worry where your Amazon parcel went or where to go for help if you’ve got noisy neighbours!
As well as being a decent place to call home, most build to rent properties are designed to create a community feeling. And many will run events or activities for the building which can be a great way to make new friends if you’re new to an area or just looking to meet some like-minded people.
Unlike a lot of traditional private rentals, build to rent housing is ultra-modern and up to date - so tend to be eco-friendly, energy efficient and include mod cons like underfloor heating which would cost a fortune to install even if you owned a house!
What are the downsides?
Although build to rent developments are excellent value for money, they’re not always the most affordable. They are usually within the upper price range ‘per square foot’ for rental properties wherever they are built. But, this isn’t surprising given the high quality of the apartments and services, and bear in mind the rent usually covers all bills.
Another aspect to consider is build to rent tenancies tend to be for longer periods - typically for 3 years or more. So if you’re looking to move regularly this could be restrictive.
Where can I find a B2R property/apartment?
There are no specific build to rent portals - they tend to be mixed in with other types of rental property on portals when you’re looking for a rental property. But, one usual giveaway is ‘utilities included in rent’.
Another way to track them down is to look out for the main players in this market who operate the developments. There are two types, roughly speaking.
These are either ‘co-living’ developments, where the apartments can be quite small but there are loads of shared social areas including lounges and dining areas. Or, they can be more traditional developments where tenants have larger apartments and fewer shared amenities.
Is Build to Rent the future for renting?
The government says it wants many more Build to Rent developments for three reasons.
1. Firstly, they are usually high quality in their own right;
2. Secondly, they help drive up the standards of older individual rental properties nearby which have to compete for tenants.
3. Third, the higher standards and communal facilities of Build to Rent developments will be more suitable to older renters – and this demographic is likely to grow.
The Centre for Housing Policy at York University estimates that by 2040 up to one-third of 60-year-olds will rent privately. This is in addition to around 40% of under 35s who will rent privately. So build to rent properties are likely to increase and there’s probably one near you or one coming soon!